First it was tulips. More recently it was tech stocks and then the housing market. Lately, it’s all about bitcoin.

All four share a common denominator: They suffered through financial bubbles, or bubble-like conditions. The first three ended badly. The jury is still out on what’s in store for bitcoin.

Yet the more the digital currency surges, the louder the debate grows around financial bubbles, which appear to be getting bigger and riskier than ever before.

Bubbles are investment manias, where prices jump so high that no fundamental analysis can rightly justify the surge. The price gains, usually sharp and quick, are typically followed by busts that tend to be just as severe.

The first known financial bubble is thought to have taken place in the 17th century, when Dutch tulip prices had a spectacular rise and fall. Recently, investment manias include the dot-com bubble of the late 1990s and the housing boom and bust in the 2000s, which paved the way for the 2008 global financial crisis.

Now, the debate centers on bitcoin. The digital currency topped $7,000 this month for the first time, a gain of more than 600% so far this year. Three years ago, bitcoin was at $300. Six years ago, it was at $2.

In the past 15 months, bitcoin has surged almost eight times as much as the tech-heavy
Nasdaq Co
mposite did in the final 15 months of the dot-com bubble. Analysts at
Bank of America
Merrill Lynch recently warned investors that financial bubbles are getting “more bubbly” than ever before.

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